IDEAS home Printed from https://ideas.repec.org/p/mad/wpaper/2020-187.html
   My bibliography  Save this paper

Political Cycles in MGNREGs Implementation

Author

Listed:
  • K. Vinay

    (Officer, Citigroup, Chennai, India)

  • Brinda Viswanathan

    (Professor, Madras School of Economics)

Abstract

Nordhaus (1975) is one of the earliest studies to provide a theoretical assessment of political business cycles, explaining opportunistic behaviour of political parties before the elections. This study is an attempt to find the nature of association between electoral incentives and the use of welfare policies in a federal democratic system through the lens of India‟s largest nationwide social security scheme, MGNREGS. Among the panel data random effects models, the Hausman-Taylor instrumental variable estimator is used for econometric modelling by leveraging data at a month on month level from April 2012 to June 2019 for twenty-two Indian states. The demand for work and person-days of work are considered for the analysis capturing respectively the demand and supply side variables of the program. After controlling for rainfall, rural population and landless agricultural labour, an asymmetric behaviour is observed for the states governed by regional parties such that they tend to generate significantly lower person-days of work near the central elections but show a significantly higher demand for work near the state elections. Moreover, states ruled by aligned central and state parties generate higher than average demand for work under the scheme. The over-arching framework of multi-party democracy and the dynamics of center-state relations present in centrally sponsored schemes create scope for such behaviour.

Suggested Citation

  • K. Vinay & Brinda Viswanathan, "undated". "Political Cycles in MGNREGs Implementation," Working Papers 2020-187, Madras School of Economics,Chennai,India.
  • Handle: RePEc:mad:wpaper:2020-187
    as

    Download full text from publisher

    File URL: https://www.mse.ac.in/wp-content/uploads/2020/02/Working-Paper-187.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2009. "Electoral goals and center-state transfers: A theoretical model and empirical evidence from India," Journal of Development Economics, Elsevier, vol. 88(1), pages 103-119, January.
    2. Gupta, Bhanu & Mukhopadhyay, Abhiroop, 2016. "Local funds and political competition: Evidence from the National Rural Employment Guarantee Scheme in India," European Journal of Political Economy, Elsevier, vol. 41(C), pages 14-30.
    3. Min, Brian & Golden, Miriam, 2014. "Electoral cycles in electricity losses in India," Energy Policy, Elsevier, vol. 65(C), pages 619-625.
    4. Das, Upasak & Maiorano, Diego, 2019. "Post-clientelistic initiatives in a patronage democracy: The distributive politics of India’s MGNREGA," World Development, Elsevier, vol. 117(C), pages 239-252.
    5. Khemani, Stuti, 2004. "Political cycles in a developing economy: effect of elections in the Indian States," Journal of Development Economics, Elsevier, vol. 73(1), pages 125-154, February.
    6. Andrew Healy & Gabriel S. Lenz, 2014. "Substituting the End for the Whole: Why Voters Respond Primarily to the Election‐Year Economy," American Journal of Political Science, John Wiley & Sons, vol. 58(1), pages 31-47, January.
    7. Ganesh Manjhi & Meeta Keswani Mehra, 2018. "Political Transfer Cycles from the Centre to the states," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 36(86), pages 207-241, June.
    8. Anubhab Pattanayak & K.S.Kavikumar, "undated". "Fiscal Transfers, Natural Calamities and Partisan Politics - Evidence from India," Working Papers 2019-184, Madras School of Economics,Chennai,India.
    9. Rajendran Narayanan & Sakina Dhorajiwala & Rajesh Golani, 2019. "Analysis of Payment Delays and Delay Compensation in MGNREGA: Findings Across Ten States for Financial Year 2016–2017," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(1), pages 113-133, March.
    10. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. Stephen Ferris & Bharatee Bhusana Dash, 2019. "Expenditure visibility and voter memory: a compositional approach to the political budget cycle in Indian states, 1959–2012," Economics of Governance, Springer, vol. 20(2), pages 129-157, June.
    2. Bharatee Dash & Angara Raja, 2013. "Do political determinants affect the size and composition of public expenditure? A study of the Indian states," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(3), pages 293-317, September.
    3. Ghosh, Saibal, 2011. "Price jitters: Do markets punish political stocks?," MPRA Paper 33170, University Library of Munich, Germany.
    4. Gonschorek, Gerrit J. & Schulze, Günther G. & Sjahrir, Bambang Suharnoko, 2018. "To the ones in need or the ones you need? The political economy of central discretionary grants − empirical evidence from Indonesia," European Journal of Political Economy, Elsevier, vol. 54(C), pages 240-260.
    5. Vadlamannati, Krishna Chaitanya, 2015. "Fighting corruption or elections? The politics of anti-corruption policies in India: A subnational study," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 1035-1052.
    6. Josef Brechler & Adam Geršl, 2014. "Political legislation cycle in the Czech Republic," Constitutional Political Economy, Springer, vol. 25(2), pages 137-153, June.
    7. Thushyanthan Baskaran & Sonia Bhalotra & Brian Min & Yogesh Uppal, 2018. "Women legislators and economic performance," WIDER Working Paper Series wp-2018-47, World Institute for Development Economic Research (UNU-WIDER).
    8. Vergne, Clémence, 2009. "Democracy, elections and allocation of public expenditures in developing countries," European Journal of Political Economy, Elsevier, vol. 25(1), pages 63-77, March.
    9. Min, Brian & Golden, Miriam, 2014. "Electoral cycles in electricity losses in India," Energy Policy, Elsevier, vol. 65(C), pages 619-625.
    10. Prakash, Nishith & Rockmore, Marc & Uppal, Yogesh, 2019. "Do criminally accused politicians affect economic outcomes? Evidence from India," Journal of Development Economics, Elsevier, vol. 141(C).
    11. Helene Ehrhart, 2013. "Elections and the structure of taxation in developing countries," Public Choice, Springer, vol. 156(1), pages 195-211, July.
    12. Balaguer-Coll, Maria Teresa & Brun-Martos, María Isabel & Forte, Anabel & Tortosa-Ausina, Emili, 2015. "Local governments' re-election and its determinants: New evidence based on a Bayesian approach," European Journal of Political Economy, Elsevier, vol. 39(C), pages 94-108.
    13. Linda G. Veiga & Georgios Efthyvoulou & Atsuyoshi Morozumi, 2018. "Political Budget Cycles: Conditioning Factors and New Evidence," NIPE Working Papers 21/2018, NIPE - Universidade do Minho.
    14. Çağatay Bircan & Saka Orkun, 2018. "Lending Cycles and Real Outcomes: Costs of Political Misalignment," LEQS – LSE 'Europe in Question' Discussion Paper Series 139, European Institute, LSE.
    15. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    16. Labonne, Julien, 2016. "Local political business cycles: Evidence from Philippine municipalities," Journal of Development Economics, Elsevier, vol. 121(C), pages 56-62.
    17. Andrew Q. Philips, 2016. "Seeing the forest through the trees: a meta-analysis of political budget cycles," Public Choice, Springer, vol. 168(3), pages 313-341, September.
    18. Corvalan, Alejandro & Cox, Paulo & Osorio, Rodrigo, 2018. "Indirect political budget cycles: Evidence from Chilean municipalities," Journal of Development Economics, Elsevier, vol. 133(C), pages 1-14.
    19. Kumar, Nitish, 2020. "Political interference and crowding out in bank lending," Journal of Financial Intermediation, Elsevier, vol. 43(C).
    20. Foremny, Dirk & Freier, Ronny & Moessinger, Marc-Daniel & Yeter, Mustafa, 2014. "Overlapping political budget cycles in the legislative and the executive," ZEW Discussion Papers 14-099, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    : elections; incumbent; MGNREGS; Hausman-Taylor IV regression;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mad:wpaper:2020-187. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/mseacin.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Geetha G (email available below). General contact details of provider: https://edirc.repec.org/data/mseacin.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.